MediGene AG Announces Consolidated Result for the Year
Revenues amounted to 23.9 million EUR (2006: 31.2 million EUR) and were generated mainly from the sales of the drug Eligard® in Europe. Compared to last year, the revenues generated with Eligard® sales increased by 80 % to 22 million EUR. In the preceding year, milestone payments received from the marketing partners Bradley Pharmaceuticals, Inc., and Astellas Pharma Europe Ltd. totaled approximately 19 million EUR, which had a very positive effect on both revenues and result. These payments became due because MediGene had reached several important milestones, e.g. the US approval for Veregen(TM) (Polyphenon® E Ointment), and the market launch of the drug Eligard® in additional European countries.
Cost of sales is primarily made up of the cost of purchase for Eligard®, and the participation of the licensor QLT USA, Inc. in the sales revenues.
The increase in operating cost results from the first-time year-round consolidation of the subsidiary MediGene Ltd. which was acquired in 2006, and from the cost accrued according to schedule for two clinical phase II trials in the EndoTAG® program.
Consequently the operating loss increased to -31.7 million EUR (2006: -8.4 million EUR), and the net loss increased to -29.9 million EUR (2006: -6.9 million EUR).
Year-end cash and cash equivalents totaled 46.5 million EUR.
Milestones reached in 2007:
US market launch of Veregen(TM) (Polyphenon® E Ointment) Six-month depot product of Eligard® launched in Europe Marketing authorization applications for the Polyphenon® E Ointment submitted to European regulatory authorities Patient recruitment for the phase II trial of EndoTAG® -1 in the indication pancreatic cancer completed EndoTAG® -1 development extended: phase II trial in the indication hormone-resistant breast cancer initiated Initiation of a phase IIa trial of RhuDex® against rheumatoid arthritis, new formulation of the active substance successfully developed
Status of the drug pipeline: Polyphenon® (product name Veregen(TM)), launched in 2007, was MediGene's second drug beside Eligard® successfully launched. Both drugs are distributed by partner companies. Another drug, Oracea®, is at an advanced stage in the European approval process. MediGene's includes, amongst others, two drug candidates with a "blockbuster" potential that are currently undergoing phase II of clinical development: EndoTAG® -1 for the treatment of solid tumors, and RhuDex® for the treatment of autoimmune diseases. In addition, MediGene has several other innovative drug candidates in clinical and pre-clinical development, as well as proprietary basic technologies available for the conclusion of partnerships.
Dr. Peter Heinrich, Chief Executive Officer of MediGene AG, comments: "As planned and announced already, MediGene made substantial investments in the further development of our product pipeline in 2007. In 2008, we will see major results from these investments: in particular, we are eagerly anticipating the efficacy data from the phase II trial of the blockbuster candidate EndoTAG®-1, as well as the decisions about the European marketing authorizations for the drugs Oracea® and Polyphenon® E (Veregen(TM)). The planned set-up of our own drug sales organization in 2008 will be the final step of our corporate strategy to cover all core areas of a biopharmaceutical company: both the research into and development of drugs to fill up our future product pipeline, as well as drug commercialization in order to finance the development of innovative drugs. By means of this dual business strategy we intend to increase MediGene's revenues in the next few years considerably, and to reduce our losses quickly. Thus the year 2008 will pave the way for MediGene's future orientation."
Expected development of the company's clinical portfolio: In 2008, MediGene expects to obtain some important clinical trial results, as well as significant progress of the company's key development programs. In the first six months 2008, the company expects to obtain preliminary results regarding the efficacy of EndoTAG®-1 in the treatment of pancreatic cancer. Moreover, the clinical phase II trial of EndoTAG®-1 in the indication hormone-resistant breast cancer will be speedily continued during the current financial year. The existing dosage form of the drug candidate RhuDex® was substantially improved, so that much higher levels of substance in blood can be achieved now with considerably less initial substance. At the same time, MediGene conducted an initial clinical phase IIa pilot trial of a preliminary formulation in about 30 patients. This trial shall provide interim data regarding pharmacokinetics and safety of the substance. On the basis of these data which are expected in the second quarter of 2008, MediGene is preparing another clinical phase II trial of the new dosage form. For another clinical program, i.e. the oncolytic virus NV1020, MediGene plans to publish data in 2008 from a clinical phase II trial in the indication liver metastases from colorectal carcinoma.
Financial forecast: For the current financial year, MediGene expects a significant increase in total revenues. These revenues will be generated mainly from product sales of Eligard®, Veregen(TM), and Oracea®. The six-month depot formulation of Eligard®, launched in Germany early in March 2007, shall be launched by MediGene's partner Astellas Pharma in several other European countries during the financial year 2008. MediGene expects this to raise the market share of Eligard® in Europe, and a further increase in the overall revenues achieved with Eligard®.
In December 2007, MediGene's marketing partner Bradley Pharmaceuticals (today's Nycomed US) started US market launch of the Polyphenon® E Ointment under the trade name Veregen(TM). Hence MediGene expects significant revenues from the commercialization of the ointment in the US market in financial year 2008 for the first time.
MediGene started to set up its own drug sales organization. The company is planning to distribute the drugs Oracea® and Polyphenon® E Ointment (Veregen(TM)) in some selected European countries by itself. These product candidates are still undergoing the approval procedures in Europe. MediGene is confident that the respective marketing authorizations will be granted in the second quarter of 2008 (Oracea®) and at the end of 2008 (Polyphenon® E-Salbe/Veregen(TM). Product launch of Oracea® in Germany is scheduled for the second half of this year. Market launch in other European countries is to follow shortly afterwards, through both the company's own sales organization as well as through marketing partnerships.
Operating expenses will increase compared to the financial year 2007. This forecast also includes the expenses for the planned set-up of the sales organization, as well as increased research and development expenses caused by the extended activities for the key product candidates EndoTAG®-1 and RhuDex®.
Since the increase in operating expenses is expected to be more than evened out by the increased revenues, MediGene expects a decrease of the net loss on EBIT basis compared to the preceding year.
MediGene is currently reviewing alternative financing options for the mTCR research program of the UK subsidiary MediGene Ltd. The management assumes that in 2009 at the latest, this focusing will lead to a noticeable easing of the research expenses.
The detailed annual report 2007 of MediGene AG is available on the internet at http://www.medigene.de/englisch/quartalsberichte.php